A guide to calculating, scheduling, and paying quarterly estimated taxes, including who must pay, how to calculate amounts, and how to avoid underpayment penalties.
Check if you expect to owe $1,000 or more in federal tax after subtracting withholding and credits
The $1,000 threshold applies to your total tax minus withholding and refundable credits. If your W-2 job withholds enough to cover most of your tax liability, you may not need to make estimated payments at all.
Check if your withholding and credits will be less than 90% of this year's tax or 100% of last year's tax
You avoid penalties if you pay at least 90% of this year's tax or 100% of last year's tax (110% if last year's AGI exceeded $150,000). Most people use the prior-year safe harbor since it's easier to calculate.
Identify all income sources not subject to withholding: self-employment, rental, investments, alimony
W-2 employees with side income are often caught off guard. If you have a day job and earn $20,000 from freelancing, your W-2 withholding likely doesn't cover the extra income tax and 15.3% self-employment tax.
Review special rules if you're a farmer, fisherman, or have highly seasonal income
Farmers and fishermen can make one annual estimated payment by January 15 instead of four quarterly payments. If you file and pay by March 1, you don't need to make estimated payments at all.
Calculate Your Estimated Tax
Estimate your expected adjusted gross income for the year
Start with last year's AGI and adjust for known changes: new clients, raises, investment gains, or lost income sources. Being within 10-15% of actual income is usually good enough to avoid penalties.
Calculate expected taxable income after deductions
Subtract either the standard deduction ($15,000 single, $30,000 joint for 2025) or your estimated itemized deductions. Also subtract above-the-line deductions like self-employed health insurance and half of SE tax.
Apply the tax brackets to your estimated taxable income
The 2025 brackets for single filers are: 10% up to $11,925, 12% to $48,475, 22% to $103,350, 24% to $197,300, 32% to $250,525, 35% to $626,350, and 37% above that. Married filing jointly brackets are roughly double.
Add self-employment tax (15.3% on 92.35% of net SE income)
Don't forget to include self-employment tax in your estimate. On $80,000 of net SE income, the SE tax alone is about $11,304. This is in addition to your regular income tax on that amount.
Subtract expected credits and any W-2 withholding from total estimated tax
If you have a W-2 job, ask your employer to increase withholding using Form W-4 to cover some or all of your side income tax. This can reduce or eliminate the need for separate estimated payments.
Divide the remaining tax by 4 for your quarterly payment amount
You can also use the annualized income installment method on Form 2210 Schedule AI if your income is uneven throughout the year. This is helpful if you earn most of your income in one or two quarters.
Mark Payment Due Dates
Q1 payment: April 15 (for income earned January 1 - March 31)
If April 15 falls on a weekend or holiday, the deadline moves to the next business day. Set calendar reminders at least 1 week before each due date to avoid scrambling at the last minute.
Q2 payment: June 15 (for income earned April 1 - May 31)
The Q2 period is only 2 months, not 3. Despite covering less time, the payment amount is still one-quarter of your annual estimated tax. This catches many first-time filers off guard.
Q3 payment: September 15 (for income earned June 1 - August 31)
This is the payment most commonly missed because it falls during summer. The IRS calculates penalties on a per-quarter basis, so missing one payment results in a penalty only for that quarter.
Q4 payment: January 15 of the following year (for income earned September 1 - December 31)
If you file your tax return and pay all tax owed by January 31, you can skip the January 15 estimated payment. This is useful if you're ready to file early and want to simplify your payments.
Make Your Payments
Set up an IRS online account at irs.gov/payments for electronic payments
IRS Direct Pay is free and pulls directly from your bank account. You'll get an instant confirmation number. Payments made by 8 PM Eastern are processed the same day.
Consider enrolling in EFTPS (Electronic Federal Tax Payment System) for scheduled payments
EFTPS lets you schedule payments up to 365 days in advance. Enrollment takes 5-7 business days because the IRS mails a PIN. Once set up, you can automate all 4 quarterly payments at once.
Record confirmation numbers for every payment made
Keep a spreadsheet with the date, amount, confirmation number, and quarter for each payment. If the IRS ever claims you didn't pay, the confirmation number is your proof. Bank statements alone may not be enough.
Adjust future quarterly payments if your income changes significantly
If you land a big contract in Q3, increase your Q3 and Q4 payments rather than waiting until filing. Conversely, if income drops, reduce future payments. You're not locked into the same amount each quarter.
Avoid Underpayment Penalties
Verify you meet one of the safe harbor thresholds: 90% of current year or 100%/110% of prior year
The 110% safe harbor applies if your prior-year AGI exceeded $150,000 ($75,000 if married filing separately). On a prior-year tax of $20,000, you'd need to pay at least $22,000 in estimated payments and withholding to be safe.
Review IRS Form 2210 to check if you owe an underpayment penalty
The underpayment penalty rate changes quarterly and is tied to the federal short-term rate plus 3 percentage points. For recent quarters, it has been around 8%. The penalty is calculated separately for each quarter you underpaid.
File for a penalty waiver if you had a casualty, disaster, or unusual circumstance
The IRS may waive the penalty if you retired or became disabled during the year, or if your income was uneven and you used the annualized method. Attach Form 2210 and check the waiver box in Part II.
When filing your annual return, report all estimated payments on Form 1040, Line 26
Enter the total of all 4 quarterly payments on Line 26. If the IRS records don't match your reported payments, processing will be delayed. This is why keeping confirmation numbers is critical.
Frequently Asked Questions
What are the quarterly estimated tax due dates?
The four quarterly deadlines are April 15, June 15, September 15, and January 15 of the following year. These dates shift to the next business day when they fall on a weekend or federal holiday. The quarters are uneven — Q1 covers January through March, Q2 covers April and May only, Q3 covers June through August, and Q4 covers September through December.
How do I calculate my quarterly estimated tax payments?
The IRS provides two safe harbor methods: pay at least 100% of your prior year total tax liability divided by four (110% if your AGI exceeded $150,000), or pay 90% of your current year expected tax. Use Form 1040-ES worksheet to calculate. The annualized income method (Form 2210 Schedule AI) can reduce payments if your income is seasonal or uneven throughout the year.
What is the penalty for not paying estimated taxes?
The underpayment penalty is calculated at the federal short-term interest rate plus 3 percentage points, applied to each missed or underpaid quarter individually. For 2024, this rate is approximately 8% annualized. The penalty accrues from the due date of the missed payment until either the payment date or the annual filing deadline, whichever comes first. You can avoid the penalty entirely by meeting one of the safe harbor thresholds. Tax laws change frequently — verify current rules with the IRS or a tax professional.
Do I need to pay quarterly taxes if I have a W-2 job and side income?
Not necessarily. If your W-2 withholding covers your total tax liability, quarterly payments are not required. A practical alternative is to increase your W-2 withholding by filing a new Form W-4 with your employer — the IRS treats W-2 withholding as paid evenly throughout the year, even if you increase it in December. This avoids the quarterly payment process for many people with side income under $20,000-$30,000.
Can I pay all my estimated taxes in one lump sum?
Technically yes — you can pay the full year estimate with your Q1 voucher in April. The IRS will not penalize overpayment. However, this means lending the government money interest-free for months. A better approach is to front-load payments slightly if your income is unpredictable, since the penalty calculation is per-quarter. You can also adjust later quarters up or down based on actual income without penalty, as long as each quarter meets the safe harbor.